Surge in online shopping is straining America's busiest port, official says
- The Port of Los Angeles reported a 22% surge in cargo volume in November as online shopping continues to strain shipping logistics.
- "It's all the change in the American consumer. We're not buying services, we're buying goods," the port's executive director, Gene Seroka, told CNBC.
- As imports from Asia come in at record levels, American exports at the port are down in 23 of the last 25 months.
The number of shipments coming through the nation's busiest container port complex in Los Angeles is up substantially from the first half of the year, reflecting a rebound in business and shift in consumer habits.
Port of Los Angeles Executive Director Gene Seroka in an appearance Monday on CNBC said cargo volume is up 50% in the second half of 2020 from what arrived at docks through the first six months of the year, and it's common for loaded ships to anchor at sea waiting for a dock to open up.
"It's all the change in the American consumer," Seroka said on "Power Lunch." "We're not buying services, we're buying goods."
The surge in shipments has put a strain on the supply chain at the seaport, which is managed by the Los Angeles Harbor Department. It's a stark contrast to the springtime when volume plummeted as the coronavirus pandemic threw global economies into recession.
With retailers seeing a spike in online orders and e-commerce business in the stay-at-home world, it has led to long delays to unload ships at ports across the country and a scarcity of desired warehouse space.
Seroka said the port was expecting the increase in demand. The Southern California port has been the busiest container port in North America the last two decades, welcoming 17% of all U.S. cargo.
In November, the Port of Los Angeles logged 890,000 20-foot-equivalent units of shipments coming through its facilities, up 22% from the same month a year earlier, powered in part by holiday orders. Imports from Asia are coming at record levels, the port authority said. Meanwhile, exports at the port have declined in 23 of the last 25 months, which is blamed in part on trade policy with China.
"In addition to the trade policy, it's the strength of the U.S. dollar that makes our goods a little bit more than they would be otherwise for competing nations in same product categories," Seroka said. "And right now, the most startling statistic, is that we're shipping back two times the amount of empty boxes than we are American exports across our docks."
Monthly cargo volume averaged nearly 930,000 in 20-foot-equivalent units since August, something that Seroka calls "unusual" this late in the year. The activity is expected to continue for several months.
Seroka said the port has focused on digitizing operations to optimize shipping schedules and logistics.
"The port is strained," he said.